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Updated 17 hours ago
Many Americans are downsizing the traditional vision of retirement as an endless vacation filled with weekslong trips abroad, daily golf and carefree sailing adventures.
Seventy-eight percent of 45- to 65-year-olds somewhat or strongly agree they'll need to cut back on spending after they retire, according to an Ipsos/USA Today survey of 1,205 adults in mid-January.
The results partly reflect the less-than-robust state of their nest eggs. Twenty-seven percent of those surveyed have no retirement savings or investments, and 22 percent have less than $100,000.
The diminished views of their golden years are also rooted in a more vigilant mindset after the Great Recession pummeled home and stock prices and forced millions of unemployed Americans to take lower-level or part-time jobs. Although payrolls and real estate and market values have more than recovered and hit record highs, many workers never reclaimed their former salary levels, endured sluggish wage growth or simply remain chastened by the downturn.
“I find that to be a (relief) that people are aware they won't have as much,” says Sheryl Garrett, a certified financial planner and founder of Garrett Planning Network. “We have fewer ostriches with their heads in the sand.”
Garrett, whose firm serves middle and upper-middle-class clients, adds, “I've met almost no one who doesn't have to reduce their standard of living” when they stop working.
Darrell Childress, 53, an information technology manager who lives in Forest, Va., earns $80,000 a year and has about $120,000 in a 401(k) plan and savings. Childress figures he'll net about $50,000 in Social Security and investment income when he hangs it up at about age 70, and is aiming the cutting knife at his bevy of tech toys.
He intends to pare his monthly DirecTV package and cellphone service and drop his satellite radio and Spotify digital music subscriptions. Childress says he'll also eat out less and save the roughly $200 a month he spends on work apparel.
“It doesn't bother me,” he says. I've always learned to make the best of what I have.” Yet, he concedes, “A small part of me looks at it like, I may really have to change my lifestyle.”
Planners, in fact, argue that paring back is easier said than done. Most workers face difficult adjustments if they have to surrender lifelong creature comforts.
“(People) will maintain (their quality of life) at any cost until they can't,” Garrett said.
When Dooley Walker retired in 2011 at age 59 after four decades at a phone company, she planned to keep up her old spending habits. Her $2,500 monthly pension would cover her basic expenses and the $450,000 or so in a retirement account would finance her several thousand dollars a month in designer clothing purchases.
But when she learned her retirement account withdrawals would be taxed at a higher rate, she halted them and instead depleted a $15,000 emergency fund. “I'm used to buying what I want when I want,” says Walker, who lives in Ontario, Calif.
She quickly gave up the shopping sprees but, “I was just sad,” she says.
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